Oiles India Pvt. Ltd. Vs Commissioner of Central Excise & CGST (CESTAT Delhi)
Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Delhi Bench, has delivered a ruling affirming that merely accounting for a disputed tax amount as an ‘expense’ in a company’s books does not automatically establish that the burden of the tax has been passed on to customers, thereby invoking the doctrine of unjust enrichment to deny a refund. The decision came in the appeal filed by Oiles India Pvt. Ltd. against an order from the Commissioner of Central Excise & CGST (Appeals), which had rejected the company’s refund claim.
The case originated from a demand for central excise duty raised against Oiles India Pvt. Ltd. concerning investment subsidy received under the Rajasthan Investment Promotion Policy – 2010 (RIPS). The company had adjusted this subsidy against VAT and CST payments. The tax department contended that this subsidy was liable for central excise duty. The initial demand raised by the department was contested by Oiles India Pvt. Ltd., and the matter reached the Tribunal. In a Final Order dated December 21, 2018, the Tribunal set aside the demand of duty and penalty, granting consequential benefits to the assessee.
Following this favorable order, Oiles India Pvt. Ltd. filed a refund claim for central excise duty amounts paid on the VAT component for periods subsequent to those covered in the initial dispute. These payments were made by the company “at their own risk” and through various entries in their RG-23A Part-II record and challans between December 2015 and June 2017.
